Oil is headed as high as $150 a barrel unless the US government does more to encourage exploration, according to Continental Resources Inc., the shale driller controlled by billionaire Harold Hamm.
(Bloomberg) — Oil is headed as high as $150 a barrel unless the US government does more to encourage exploration, according to Continental Resources Inc., the shale driller controlled by billionaire Harold Hamm.
Crude output in the Permian Basin will one day peak as it already has in rival shale fields such as the Bakken region of North Dakota and the Eagle Ford in Texas, Continental Chief Executive Officer Doug Lawler said during an interview with Bloomberg TV. Without new exploration, “you’re going to see $120 to $150” oil, he said.
“That’s going to send a shock through the system,” he said on the sidelines of Hamm’s first ever American Energy Security Summit in Oklahoma City. Without policies encouraging new drilling, “you’re going to see more pressure on price.”
Sprinkled among pro-oil presentations from Republican presidential candidate Nikki Haley and Goldman Sachs Group Inc.’s David Solomon, shale executives issued calls for the Biden administration to adopt consistent policies that will allow them to drill more. Failure to do so, they warned, will lead to tighter energy supplies and higher prices.
But the CEOs were quick to note that they have no intention of markedly boosting crude output in response to oil’s march toward the $100 mark for the first time in more than a year.
After touching an all-time high in July, oil production in US shale fields is contracting and government analysts are forecasting a third straight monthly decline in October.
“I hear people say, ‘We’re back up to record levels of production,’” Chevron Corp. Chief Executive Officer Mike Wirth told summit attendees. “With better policy we would be beyond that.”
Haley said she would seek to boost domestic energy production by expanding drilling, speeding up permitting and building interstate pipelines. She also vowed to roll back some energy subsidies and regulations, and revive the Keystone XL project.
“Nikki Haley was a great example of someone who cares about us, who appreciates what we do,” said Occidental Petroleum Corp. CEO Vicki Hollub. “Our politicians can’t lose sight of the fact that unless we’re energy independent we do not control our own destiny.”
Even if oil breaches the $100 mark, Continental has no plans for a burst of output, Lawler said. Benchmark US crude futures have risen 12% this year to more than $90.
“We are investing at a very prudent level consistent with our cash flows,” Lawler said. “To go and invest and being producing as much as we can is not how we generate the greatest value.”
(Updates with appearances by Solomon, Haley starting in fourth paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.